Aerial mapping provider Nearmap has been forced by the ASX to explain its disclosure of a legal battle with US rival Eagleview that sent its share price sharply lower this month.
Nearmap shares crashed more than 23 per cent to a low of $1.79 earlier this month on the news that Eagleview, which dominates the US market for aerial mapping, had started legal action alleging it infringed its patents relating to aerial roof reports – a lucrative market in the US.
Nearmap boss Dr Rob Newman believes the business will be able to successfully defend the patent infringement suit filed by two of its competitors.Credit:Trevor Collens
Nearmap, whose shares rose sharply higher on May 4 with the announcement of an increase to its revenue guidance, said it was first made aware of the legal action at 9.58am on Wednesday, May 5, 2021.
“The email, from lawyers in the United States, attached a 96-page complaint which was filed in the United States District Court (District of Utah, Northern Division) … This was the first [Nearmap] became aware of the information,” it said in reply to a query from the ASX.
Trading of the company’s shares was paused at 11.11am that morning and it went into a trading halt citing “potential legal proceedings”.
“Nearmap then, without delay, took immediate steps to conduct a more detailed analysis of the information to enable it to prepare an announcement that was accurate, complete and not misleading,” it said.
The company said it is in compliance with listing rules.
Nearmap’s chief executive Rob Newman dismissed the claims from Eagleview that his company had infringed eight patents. “EagleView’s roof reports are used by a wide range of organisations, large and small, across a number of industries, including the government, construction, insurance, and solar industries,” Eagleview said in court documents.
The day before it became aware of the legal action, Nearmap – which offers 2D and 3D aerial image services to customers such as government planning agencies, architects and solar providers – had just increased its forecast for the company’s 2021 annual contract value (ACV) target.